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Planning For 100: 6 Ways to Retire With Financial Independence

Are you prepared for retirement?

If the answer is no, you’re not alone.

1 in 3 Americans have zero retirement savings. This includes people who are quickly approaching retirement (ages 50-64). Even those who are saving aren’t putting away very much.

This is especially troubling since people are living longer. That means there are a lot of people who won’t be able to keep up their lifestyle during retirement. I always tell my clients to plan as if they’re going to live to 100 (never say never – the oldest woman who ever lived was 122!).

If you haven’t been saving for retirement or if you haven’t saved enough, it’s not too late to turn things around. No matter which stage you’re at, here are six ways to retire with financial independence:

Know your goals.

What type of lifestyle do you want in retirement? Do you want to sell the house? Move to a new area? Pick up a new hobby? Travel? If you don’t know your goals, then you’re going to have a hard time planning and budgeting for them. Sit down with a certified RICP®and figure out your goals ahead of time. That way you can take steps to reach them.

Build a budget.

Who doesn’t enjoy talking about budgets? All joking aside, every plan needs a budget. Take a look at the goals you just created and decide how much they cost. The more specific you can be, the better. Then figure out how much savings you’ll need for retirement (general rule is 65 to 70 percent of your current household budget).

Here comes the not so fun part: think of every possible expense you may incur during retirement. This may include moving costs, medical expenses, financial gifts to children and grandchildren, travel costs, etc. Take into account unexpected costs like illness, death of a spouse or caring for a family member. Review your expenses and be honest with yourself. Do you have the funds to support your goals and expenses? If not, then you need to come up with a more realistic plan.

Plan to work longer than you expect.

No one wants to think about working during retirement. But if you’re like most people, then you’ll probably be working well into retirement.

This doesn’t have to be a bad thing. A Bucks County retirement planning advisor can help you create a retirement income plan that incorporates a healthy mix of financial strategies and tools, including Social Security and pension benefits and tax-efficient strategies for increasing your cash flow. Look on the bright side: here’s your chance to pursue a new job or hobby you’ve always wanted to try!

De-clutter your lifestyle.

Retirement is a great excuse to simplify your lifestyle. This is a stage of life where you want to subtract, not add. Look for hidden savings by reducing monthly bills. Maybe you can refinance your mortgage (or better yet, pay it off completely). Or maybe you can cancel your landline phone (most people use cell phones anyway). There are tons of ways you can cut back and save money. Just make sure that the money you save gets put directly into a retirement account.

Delay claiming Social Security.

The early bird doesn’t always catch the worm. It may be tempting to take the Social Security payment as soon as you can get it – which is age 66 for baby boomers and 67 for those born in 1960 or later. Resist the urge. Did you know that if you delay claiming Social Security your monthly payments could increase by eight percent each year you delay? Let’s break that down: if you sign up for Social Security payments at age 70, your benefits could increase by 32 percent. Good things really are worth waiting for.

Be cautious (but not too cautious).

Fear causes people to make poor financial decisions. For example, some people keep too large a percentage of their savings in fixed accounts because they’re afraid of the stock market. Those fixed accounts lose value over time due to inflation. Other people are too risky and pick volatile investments that lead to huge losses.

You need to have the right balance between caution and risk. Figure out what percentage of savings you should put in fixed accounts and how much you should invest in stocks. Not sure what to put where? Go back to the plan you created. What do you need the money for and when do you think you’ll need it? When you hold yourself accountable to your plan, the answers become clearer. Enlist the help of a Bucks County retirement planning advisor to talk through your options so you can make good choices for your retirement income.

Let’s be honest: retirement can be scary, especially in today’s economy. The best thing you can do is put in the hard work and planning now. Preparation is key to financial independence. Don’t let fear keep you from the retirement lifestyle you deserve.

Interested in your retirement income options? Contact a Bucks County retirement planning advisor for a free consultation.


Disclaimer: All articles/blog posts are for informational purposes only, and do not constitute legal advice. If you require legal advice, retain a lawyer licensed in your jurisdiction. The opinions expressed are solely those of the author, who is not an attorney.

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